Question

If the United States (US) can produce a component of widgets at a lower cost than any other product produced by the thing

US but not as low as the cost incurred by Canada for producing the same component, does the US make any gains by continuing to produce said component?
a. Yes, because the US can still produce it at a lower cost.
b. No, because the cost is higher than in Canada.
c. It depends on other factors.
d. Yes, if demand is high.

Answer 1

The US may or may not make gains by continuing to produce the component, depending on other factors.

Step-by-step explanation:

The answer to the question is c. It depends on other factors. While the US can produce the component at a lower cost compared to other products it produces, the fact that Canada can produce it at an even lower cost means that the US may not make gains by continuing to produce it. Other factors such as demand, availability of resources, and comparative advantage need to be considered to determine whether the US should continue producing the component or not.